Asia report: Markets mixed at end of March quarter

Markets were mixed in Asia on Thursday, with some retreating from their strident advances seen earlier in the week after the dovish stance from US Federal Reserve chief Janet Yellen on the state of the economy.

In Japan, the Nikkei 225 spent parts of the day both above and below the waterline, before closing down 0.71% to 16,758.67. It was the last day of the country’s financial year, with the index losing 11.95% in the fourth quarter.

In corporate news from the isles, Hon Hai Precision Industry - better known as Foxconn - confirmed after close on Wednesday that it had reached agreement to buy electronics maker Sharp, paying around £2.4bn for a two-thirds stake.

That was more than £600m less than its initial offer, and led to Sharp shares closing down 4.44% in Tokyo. Hon Hai closed up 1.31%.

Airbag manufacturer Takata gained 5.8%, paring back some of its 19.45% losses on Wednesday. Reports surfaced this week suggesting the costs of the recall on its faulty airbag inflators would now reach JPY 2.7trn (£16.7bn), though Takata denied it had calculated a cost estimate on Thursday.

Toshiba shares were also up, by 5.8%, after it announced on Wednesday it had reached a deal to sell 80.1% of its white goods unit to Chinese manufacturer Midea Group. Nikkei reported the deal was worth JPY 53.7bn.

Finally in Tokyo, Sun Corp gained 6.96% on Thursday, taking its March quarterly gains to 64%. The rise came after reports its subsidiary - Israeli company Cellebrite - assisted the US FBI in unlocking the iPhone of one of the San Bernardino shooters.

Markets on mainland China ended higher, with the Shanghai Composite Index finishing 0.12% ahead at 3,004.37, though it remained off 15.11% for the March quarter. The Shenzhen Composite was up 0.28% at 1,912.20, though it was down 17.18% in the three months to 31 March.

Before markets opened, the People’s Bank of China set renminbi stronger against the dollar at CNY 6.4612 per USD, compared with CNY 6.4841 on Wednesday. The onshore yuan trades 2% above or below the loose peg.

South Korea’s Kospi closed down 0.31% at 1,995.85, while the Hang Seng Index in Hong Kong slid 0.13% to 20,776.70. The two indexes were up 1.76% and down 5.19% for the year to date respectively.

Government data released in South Korea showed industrial output as rising 3.3% month-on-month in February, after a revised 2.1% reading in January. Reuters-polled analysts were picking a 0.2% decline for the month.

Analysts were quick to point out that the reading did not necessarily mean a turnaround for the country, with semiconductor demand driven by the new Samsung Galaxy S7 smartphone being behind much of the increase.

In Hong Kong, Dalian Wanda Commercial Properties shares rocketed ahead by 18.43% after its parent Dalian Wanda Group announced it was considering taking the real estate firm private.

The year so far was described as a tale of two halves by IG chief market strategist Chris Weston on Thursday afternoon, with the first half defined by fears of a complete collapse led by Chinese jitters.

"The world is seemingly a perfectly pleasant place to be, led by Janet Yellen, who has left traders with a growing view to avoid listening to regional Fed members and totally focus on her comments," he noted.

Oil prices were down during Asian trading, as the session reached its conclusion. Brent crude was last down 0.44% at $39.09 per barrel, while West Texas Intermediate lost 1.35% to $37.81.

Down under, the S&P/ASX 200 finished 1.45% ahead at 5,082.78. It was led by rises in financials, energy and materials, though it remained 4.02% down for the year to date.

The big four Australasian banks - Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac - were all up by between 1.51% and 2.34%. The sector had recently lost ground, as concerns grew about potential losses thanks to the exposure of their loan books to the shaky resources sector.

New Zealand pushed for another record high, with the S&P/NZX 50 gaining 0.6% to 6,752.42. The benchmark’s quarterly gains to March were 4.7%, with most trading sessions in March leading to fresh records for the index.

"The NZX is just continuing on its remarkable run this month, there's generalised strength across a number of names as we come into the end of this quarter," said Matthew Goodson, managing director at Salt Funds Management.

In currencies, the yen shifted closer to the greenback, and was last 0.07% stronger at JPY 112.35 per US dollar. The Aussie also gained on its American counterpart, last sitting 0.04% stronger at AUD 1.3031, while the Kiwi moved 0.06% closer at NZD 1.4445 per USD.